WASHINGTON -- U.S. President Barack Obama told state lawmakers Friday he was issuing a directive to provide guidance on what constitutes "acceptable use of taxpayer money."
"Decisions about how Recovery Act (stimulus) dollars are spent will be based on the merits," Obama said during a speech to the National Conference of State Legislature. "I don't need to remind you the American people are watching what we do. They expect to see their hard-earned money spent wisely."
The ... [full story]

NEW YORK -- A federal appeals court in New York Friday denied trader Bernard Madoff's appeal to be released from jail pending sentencing for running a vast Ponzi scheme.
"(The) district court did not clearly err in its assessment that the defendant has failed to show by clear and convincing evidence that he is not likely to flee," the 2nd U.S. Circuit Court of Appeals said.
The three-judge panel said it could find no error in ... [full story]

WASHINGTON -- Two Russian planes flew within 500 feet of U.S. Navy ships participating in military drills with South Korea, military officials said.
After trying unsuccessfully to contact the pilots, U.S. fighter jets met up with the Russian planes and flew with them until they left the area, CNN reported.
One incident occurred Monday, when Russian Ilyushin IL-38 maritime patrol aircraft flew over the aircraft carrier USS John C. Stennis while it was in international ... [full story]

WASHINGTON -- President Barack Obama, in a message to the Iranian people, said Friday the United States seeks "engagement that is honest" with Iran.
In a video message released by the White House, Obama addressed Iranians on the occasion of Nowruz, the first day of spring and of Iran's new year.
"In particular, I would like to speak directly to the people and leaders of the Islamic Republic of Iran," Obama said.
After observing that ... [full story]

WASHINGTON -- The man who replaced President Barack Obama in the U.S. Senate, Roland Burris, wants to set up a legal defense fund to protect his seat, a Senate aide says.
Burris, D-Ill., expects to need as much as $400,000 for ongoing ethics and perjury investigations surrounding his appointment to the Senate by impeached Illinois Gov. Rod Blagojevich, the Chicago Tribune reported Friday.
The Chicago law firm of Gonzalez, Saggio & Harlan has filed an ... [full story]

WASHINGTON -- Two U.S. Navy vessels collided Friday in the Strait of Hormuz near Iran, slightly injuring 15 sailors, the U.S. Fifth Fleet commander said.
A submarine, the USS Hartford, collided with the amphibious ship USS New Orleans in one of the busiest commercial route for oil tankers, CNN reported. Both vessels were operating under their own power.
Military officials said the nuclear propulsion plant on the 362-foot-long sub wasn't damaged but the New Orleans ... [full story]

SACRAMENTO -- Sacramento will find shelter for as many as 150 homeless people who have been living in a tent city just north of the downtown area, officials say.
Sacramento Mayor Kevin Johnson says the homeless encampment near the Blue Diamond Growers plant will be cleared and the area fenced off to prevent future encampments, The Sacramento Bee reported Friday.
Homeless people have been illegally camping in California's capital city for years but the situation ... [full story]

WASHINGTON -- Nestle USA told a congressional panel it decided not to buy from Peanut Corporation of America after finding unsanitary conditions at its U.S. plants.
Nestle said its inspectors saw rat droppings, live beetles, dead insects and the potential for microbial contamination at PCA facilities in Georgia and Texas, The Washington Post reported Friday.
Unlike Nestle, Kellogg and other companies bought products from PCA, which filed for bankruptcy last month after prompting the largest food recall ... [full story]

DALLAS -- Former U.S. President George W. Bush's memoir will include defining moments such as how he found faith and how he chose his running mate, aides say.
A contract with Crown Publishing, a division of Random House, was to be announced Thursday, Politico reported. Crown also published U.S. President Barack Obama's books.
The tentatively titled "Decision Points" traces the 43rd president's early life leading up to his decision to run for president ... [full story]

WASHINGTON -- The U.S. Treasury investigator is examining what role the department played in AIG's award of millions in bonuses while getting federal bailouts, officials say.
The investigation by Treasury Inspector General Eric Thorson is one of several official inquiries into the AIG bonus uproar, ABC News reported Thursday.
Thorson will examine which Treasury officials knew of the American International Group's "retention payment" plans for its Financial Products division, when they knew it, ... [full story]

WASHINGTON -- China's spy agency tries to steal U.S. secrets while cooperating with the CIA, a veteran Chinese intelligence officer who defected to the United States said.
China's Ministry of State Security, modeled after the former Soviet Union's KGB, "spends a tremendous effort to send out spies to important countries like the United States to collect information," Li Fengzhi told The Washington Times aided by an interpreter.
Li, awaiting U.S. political asylum approval, ... [full story]

GALVESTON, Texas -- The police chief of Galveston, Texas, says nine police officers have been suspended over a melee at a 2008 wedding, despite a lack of formal complaints.
Galveston Police Chief Charles Wiley said he handed down suspensions without pay to nine officers Wednesday, along with written reprimands to four officers, in relation to the Oct. 5 incident, the Houston Chronicle said.
The suspensions, which ranged from a single day to an entire week, ... [full story]

WASHINGTON -- A new Web site for consumers seeking information about the U.S. federal mortgage modification and refinancing program began operating Thursday.
Run by the U.S. Departments of Treasury and Housing and Urban Development, MakingHomeAffordable.gov provides self-assessment tools to help borrowers determine whether they're eligible for modifying or refinancing their mortgages, the departments said in a news release. It also can calculate estimated monthly payment reductions and provides resources for borrowers.
Announced by U.S. President ... [full story]